Jose Lopez v. Judy Aron, et al.

a.

Legal Standard

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack, or from matters outside the pleading that are subject to judicial notice. (Code Civ. Proc., § 430.30, subd. (a).)

A demurrer tests only the legal sufficiency of the pleading, and “[t]he facts alleged in the pleading are deemed to be true, however improbable they may be. [citation].” (Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1034.) While the Court must accept as true all material facts properly pled, it may disregard logical inferences, contentions, or conclusions of fact or law. (Schep v. Capital One, N.A. (2017) 12 Cal.App.5th 1331, 1335-1336; Winn v. Pioneer Medical Group, Inc. (2016) 63 Cal.4th 148, 152.) A demurrer must be overruled if the plaintiff has stated a cause of action under any possible legal theory. (Hale v. Sharp Healthcare (2010) 183 Cal.App.4th 1373, 1379.)

When reviewing a demurrer, the court must draw all reasonable inferences in favor of the plaintiff, not the defendant. (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1239.) “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.)

Demurrers for uncertainty are sustained “ ‘ “only if the pleading is so incomprehensible that a defendant cannot reasonably respond.’ ” [Citations.]” (A.J. Fistes Corp. v. GDL Best Contractors, Inc. (2019) 38 Cal.App.5th 677, 695.)

b. Discussion

i. Breach of Contract

Defendants contend the FAC fails to state a cause of action for breach of contract because the FAC’s own allegations and exhibits demonstrate that Defendants performed their obligations under the settlement agreement. (Ex. A to FAC. 3)

The parties’ settlement agreement specifies Defendants’ consideration for the settlement of Plaintiff’s action was as follows:

2 Defendants also demur pursuant to Code of Civil Procedure section 430.10, subd. (d) on the grounds of misjoinder of parties as to Kathryn Aron. That ground is moot as Ms. Aron was dismissed. 3 Exhibit A to the FAC was filed separately from but concurrently with the FAC and is incorporated by reference.

1. CONSIDERATION Within fourteen (14) business days after the full execution of this Agreement and the expiration of any applicable revocation periods, Employer shall pay the total sum of One Hundred Seventy-Five Thousand Dollars ($175,000.00) as follows:

a. A check made payable to "Jonas Bailey" in the amount of Sixty-Four Thousand Two Hundred and Fifty Dollars and no cents ($64,250.00) representing attorney's fees and costs, for which a Form 1099 will be issued. b. A check made payable to "Jose Guadalupe Lopez" in the amount of One Hundred Ten Thousand Seven Hundred Fifty Dollars and no cents ($ I 10,750.00) less all applicable payroll deductions and withholdings, for which appropriate tax forms will be issued. (Cmpl., Ex. A, ¶ 1.)

As set forth above, the FAC alleges that Defendants issued a check in the net amount of $47,103.25, but that the bank refused to pay on the check when it was deposited because it was stale. (Cmpl., ¶ BC-2.) Defendants contend that the issuance of this check constituted timely tender of performance under the express terms of the contract and that Defendants fulfilled their obligations under the contract. Defendants contend that no provision in the settlement agreement obligates Defendants to reissue a check upon demand, particularly where the lapse was due to Plaintiff’s own inaction. Defendants contend that the stale check arose from no action or omission by Defendants, but from Plaintiff’s failure, and therefore Plaintiff fails to allege facts showing a breach of contract.

However, Defendants cite no authority on the issue of whether the staleness of the check relieves the settling Defendants of their obligations under the settlement agreement. Instead, the Defendants merely make conclusory arguments.

Generally, mere delivery of a check is not itself payment. (See Long Beach Memorial Medical Center v. Allstate Ins. Co. (2023) 95 Cal.App.5th 710, 719; see also Cal. U. Com. Code, § 3310(b) [Unless otherwise agreed, if an uncertified check is taken for an obligation, the obligation is only suspended until dishonor of the check or until it is paid or certified.])

Under the California Commercial Code, section 4404, “[a] bank is under no obligation to a customer having a checking account to pay a check, other than a certified check, which is presented more than six months after its date, but it may charge its customer's account for a payment made thereafter in good faith.” However, that section governs the relationship between the bank and its account holder, not the obligation of the account holder to the named payee on the check.

While the settlement agreement provides that a check will be issued payable to Plaintiff, that check is part of the agreement that “Employer shall pay the total sum of One Hundred Seventy- Five Thousand Dollars ($175,000.00).” (Cmpl., Ex. A, ¶ 1.) While the check was delivered, “Employer” has not paid the total sum agreed upon as required under the agreement. Nor do

Defendants identify any provision in the settlement agreement that specifies a time in which the check must be cashed otherwise the Employer’s agreement to pay the total amount is extinguished.

Defendants have failed to meet their burden at this time of showing that Plaintiff’s allegations fail to state a claim for breach of contract. Nor do Defendants show the cause of action is uncertain. Defendants’ demurrer to the first cause of action is overruled.

b. Common Counts

Plaintiff’s FAC alleges a common count for work, labor, services and materials rendered at the special instance and request of defendant and for which defendant promised to pay plaintiff the sum of $47,103.25. (Cmpl. ¶ CC-1.b.(2).)

Defendants demur to Plaintiff’s common counts, because a quasi-contract claim may not be pursued when the subject matter of the dispute is governed by an express contract. “[A]s a matter of law, a quasi-contract action for unjust enrichment does not lie where, as here, express binding agreements exist and define the parties' rights. [Citations.]” (California Medical Ass'n, Inc. v. Aetna U.S. Healthcare of California, Inc. (2001) 94 Cal.App.4th 151, 172.)

Similarly, “[a] quantum meruit or quasi-contractual recovery rests upon the equitable theory that a contract to pay for services rendered is implied by law for reasons of justice. [Citation.] However, it is well settled that there is no equitable basis for an implied-in-law promise to pay reasonable value when the parties have an actual agreement covering compensation.” (Hedging Concepts, Inc. v. First Alliance Mortgage Co. (1996) 41 Cal.App.4th 1410, 1419.)

Plaintiff contends in opposition that the common count claim may be pleaded in the alternative. However, while the rules of pleading permit plaintiffs to set forth alternative theories in varied and inconsistent counts, the allegations of a common counts claim must explicitly deny the existence or enforceability of an agreement. (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1389.) In Klein, the court of appeal found that the trial court did not err in sustaining the defendant’s demurrer to the plaintiff’s unjust enrichment claim. “Although a plaintiff may plead inconsistent claims that allege both the existence of an enforceable agreement and the absence of an enforceable agreement, that is not what occurred here.

Instead, plaintiffs' breach of contract claim pleaded the existence of an enforceable agreement and their unjust enrichment claim did not deny the existence or enforceability of that agreement. Plaintiffs are therefore precluded from asserting a quasi-contract claim under the theory of unjust enrichment. [Citation.]” (Id., at pp. 1389-1390.)

Additionally, Plaintiff merely alleges failure to pay under a contract and does not allege any facts showing that he is owed for work, labor, services and materials rendered. The Court finds the common count cause of action fails to state a claim and the facts and theory of the claim are uncertain.

Defendants’ demurrer to the second cause of action is sustained with leave to amend.

c. Misjoinder of Judy Aron

Finally, Defendants contend that the FAC fails to state facts sufficient to constitute a cause of action against Judy Aron, and that the claims against her are subject to demurrer under Code of Civil Procedure section 430.10, subdivisions (d) and (e).

Defendants contend that while Judy Aron is identified in the recitals of the settlement agreement, the agreement is between Plaintiff and Aron Hill Vineyards, a California corporation, and does not contain any separate, signed individual undertaking by her in a personal capacity. (FAC, Ex. A.)

However, Judy Aron is specifically identified and defined as a party to the agreement:

This Confidential Settlement Agreement and Release of A11 Claims (hereinafter "Agreement") is made and entered into by Jose Guadalupe Lopez ("Lopez" or "Employee"), on the one hand, and Aron Hill Vineyards, a California corporation, and Judy Aron (collectively “Employer” or “Released Parties”) on the other hand. (FAC, Ex. A, p. 1, emphasis added).

The “Employer” (i.e., Aron Hill Vineyards and Judy Aron collectively), is obligated to pay the total amount of the settlement. (FAC, Ex. A, ¶ 1.)

Moreover, the comprehensive release of claims includes claims against Judy Aron:

COMPREHENSIVE RELEASE OF CLAIMS Lopez, on behalf of himself and his heirs, executors, administrators, and assigns, hereby fully releases and forever discharges the Released Parties (defined as Aron Hill Vineyards, Judy Aron, and their past, present and future officers, directors, shareholders, employees, agents, attorneys, parent companies, subsidiaries, affiliates, predecessors, successors, assigns, and representatives) from any and all claims... (FAC, Ex. A, ¶ 2, emphasis added.)

Plaintiff’s FAC alleges sufficient facts at this stage to state a claim against Judy Aron.

ORDER (PROPOSED)

Defendants’ motion to strike is denied as moot as to Kathryn Aron. Defendants’ unopposed motion to strike the fictitious “Doe” defendants is granted.

Defendants’ demurrer to the first cause of action, and as to Judy Aron, is overruled.

Defendants’ demurrer to the second cause of action is sustained with leave to amend.

Plaintiff shall file and serve an amended complaint within ten days of service of notice of this order. (Cal. Rules of Court, rule 3.1320 (g).)

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